Nearly half of all potential Vero Beach homebuyers can afford the median-priced home in the area, but that’s not much help if they can’t get a mortgage.
Six years after the subprime mortgage meltdown, banks remain tight-fisted, even with solid borrowers — a fact they attribute to shifts in government regulation and demands that they buy back bad loans. Mortgage credit has not eased much since 2007, according to Federal Reserve surveys of loan officers, even while low rates and the housing recovery have borrowers lined up looking for financing.
Which Vero Beach Homebuyers Are Having Problems With Lenders?
First time Vero Beach homebuyers and those who are self-employed find themselves jumping through especially complex hoops. Even would-be borrowers with crystal clear credit are having to justify even the smallest quirks in their finances, and the application process can take months.
This is all in sharp contrast to 2006 when just 12% of Vero Beach homebuyers could afford the median-priced home, but seemingly anyone could get a mortgage to buy one. The turnabout highlights a cruel fact of the housing crash: Many who were crushed by lost home values — or other economic pain related to the housing meltdown — may now miss out on record low prices and interest rates if they want to become Vero Beach homebuyers again.
Complaints about tight-fisted lenders have emanated not just from potential Vero Beach homebuyers and industry sources, but from Federal Reserve Chairman Ben S. Bernanke, who at least twice in the last year has remarked on how the pendulum has swung too far.
In November, Bernanke said, “Overly tight lending standards may now be preventing creditworthy borrowers from buying homes, thereby slowing the revival in housing and impeding the economic recovery.” There is no indication that things have improved since he made those comments.
Despite the problems, there have been some improvements since the mortgage market tightened up during the financial crisis. For instance, refinancing of certain underwater mortgages — those that borrowers owe more on than their homes are worth — has become more available for homeowners who have stayed current on payments under an Obama administration program that offers incentives to banks. And jumbo loans, those for more than $625,000, nearly disappeared after the crash, but now are widely available at rates less than a half a point higher than traditional loans.
The tighter mortgage market is all the more reason not to try to become a Vero Beach homebuyer alone. You need a professional to help you through the mortgage maze. Talk to us. We have a lot of experience dealing with lenders, and between our experience and the expertise of some of our preferred lenders that we work with on a regular basis, we can help you get through it all.
For more tips on getting through the mortgage maze, visit our Vero Beach Mortgage Info under our Vero Beach Real Estate Categories to your right.